Historically, charity and not-for-profit boards have worked for the good of the cause, with no expectation of payment.
The world has changed – people work longer hours and have less time to contribute, the retirement age has increased, and everyone seems to be busy – but this view of the way boards should operate persists. And that was before the global pandemic upended everything and sent volunteer numbers through the floor.
In this climate, your organisation might be considering paying its board directors, in recognition of the work they do and the responsibility they carry and to make it easier for you to recruit new directors.
Of course paying board directors is only one of the measures you might adopt to achieve these ends. And there are pros and cons of paying board directors that are unrelated to those outcomes.
These resources are designed to be read in conjunction with ICDA's Board Payment Wizard, which leads you through a series of questions and answers designed to help your organisation explore all of those issues and more. It explores the practical, financial and ethical dimensions of the question of whether board members should be paid.
So what's the purpose of the Board Payment Wizard?
The Board Payment Wizard leads you through a series of questions and answers designed to help your organisation to decide whether you should pay your board members. It explores the practical, financial, reputational and ethical dimensions of the question of whether board members should be paid.
Let’s be clear about what the Board Payment Wizard doesn’t do. It doesn’t spit out a yes/no answer to the question of whether your organisation should or should not pay its board members. That’s because there’s no right or wrong answer. It all depends on what’s right for your organisation at this time – but the Board Payment Wizard will help you to think through all the issues involved.
How to use the Board Payment Wizard
There are two ways your organisation could work through the process.
- You could have all your board members as individuals answer the questions separately, and then come together as a group to discuss the results.
- You could meet as a group to work through the questions collectively – you might like to project the questions onto a large screen to help your round-table discussion.
There’s no right or wrong way to do it – it depends on the preferences and dynamics of your group. You might find that some people feel able to answer more honestly if they’re working through the questions alone. And this approach works well for people who need time alone to think through their responses. On the other hand, you might generate really useful discussions by working through the questions together.
Ready to get started?
Follow this link: Board Payment Wizard
- Paying Directors in the Not-for-profit Sector (published by ICDA, June 2022)
General advice about payments
- Remunerating Charity Board Members (published by the ACNC)
- CEO remuneration This help sheet is about setting the salary of the CEO, not the board members, but it outlines some useful principles.
General advice for boards
- Damn Good Advice for Board Members
- Ten questions every director needs to ask about the board’s director payment policy
Recruiting, diversity and representation on the board
- Revitalise Your Community Board: A makeover for community groups that want to lift their game
- Board diversity help sheets
- Board accountability
- Board succession part 1
- Board succession part 2
- Board succession part 3
- Advertise a board vacancy